A few things are worth picking out of this story in the Guardian, e.g.UK total assets, the UK market's attractiveness to other countries, andwhom QE has helped the most.

A booming City and rising house prices provided a double boost toBritons holding assets in 2016 as they pushed the nation’s wealththrough the £10tn mark, according to a new survey.

Lloyds Bank’s private banking arm said total household wealth in the UKincreased by £892bn last year – with the property and financial marketseach responsible for half the rise.

News of the 9% jump in the value of the assets from £9.6tn to £10.5tnduring 2016 is likely to rekindle the debate about the UK’s wealthinequality. Previous surveys have shown that a tenth of adults own halfthe nation’s wealth, while 15% own nothing or have negative wealth.

The Bank of England has acknowledged that the richest 10% of Britonsgained most from the money creation programme known as quantitativeeasing, since the increase in the supply of credit boosted demand forfinancial assets. Since the better off held a greater proportion ofthese assets, 40% of the gains of rising share and bond prices went tothe richest 5% of households.

Post by James HarrisA few things are worth picking out of this story in the Guardian,e.g. UK total assets, the UK market's attractiveness to othercountries, and whom QE has helped the most.A booming City and rising house prices provided a double boost toBritons holding assets in 2016 as they pushed the nation’s wealththrough the £10tn mark, according to a new survey.

Is adding up all the house prices a valid concept? Surely, houses are'worth' so much only because nearly all of them are not being sold atany particular time. If you are going to calculate a total value of allhouses and postulate that it is a meaningful quantity, surely you mustdo so under the hypothetical condition that they are all simultaneouslyfor sale?

An insurance company wouldn't accept a valuation for a jewellerycollection which was conditional on no more than e.g. one piece beingsold per year...

Post by James HarrisLloyds Bank’s private banking arm said total household wealth in theUK increased by £892bn last year – with the property and financialmarkets each responsible for half the rise.News of the 9% jump in the value of the assets from £9.6tn to £10.5tnduring 2016 is likely to rekindle the debate about the UK’s wealthinequality. Previous surveys have shown that a tenth of adults ownhalf the nation’s wealth, while 15% own nothing or have negativewealth.The Bank of England has acknowledged that the richest 10% of Britonsgained most from the money creation programme known as quantitativeeasing, since the increase in the supply of credit boosted demand forfinancial assets. Since the better off held a greater proportion ofthese assets, 40% of the gains of rising share and bond prices wentto the richest 5% of households.https://www.theguardian.com/business/2017/aug/08/total-uk-wealth-city-property-homes-inequality-saving

Or basically what I said a week or two ago, QE was helicopter money,but designed only to land on carefully-chosen beneficiaries, therebyavoiding inflation of general prices.

The same has happened with all the big central banks, the Fed, theECB, BOJ etc. I'm surprised that the Guardian is willing toacknowledge this, possibly the greatest theft in history.

Post by JoeOr basically what I said a week or two ago, QE was helicopter money,but designed only to land on carefully-chosen beneficiaries, therebyavoiding inflation of general prices.The same has happened with all the big central banks, the Fed, theECB, BOJ etc. I'm surprised that the Guardian is willing toacknowledge this, possibly the greatest theft in history.

Those beneficiaries (or rather beneficiary) was H.M Treasury.

The government authorised the "printing of money" to buy its own debt. QE involved the removal of working assets (bonds) from banks in return for cash. The only way of putting this cash to work was to lend it out as different forms of debt (consumer debt, personal debt, corporate debt etc.)

In the meantime bond interest paid by the Treasury went to the BoE the new holders of the bonds. However, the BoE is nationalised and so all profits that it makes go into the Treasury's account.

Further when bonds mature any redemption paid by HMT goes to the holder (BoE)comes back by the same route.

Post by James HarrisA few things are worth picking out of this story in the Guardian,e.g. UK total assets, the UK market's attractiveness to othercountries, and whom QE has helped the most.A booming City and rising house prices provided a double boost toBritons holding assets in 2016 as they pushed the nation’s wealththrough the £10tn mark, according to a new survey.

Is adding up all the house prices a valid concept?

IMO the total is meaningless. It's the direction of change which isrelevant.

Post by James HarrisThe Bank of England has acknowledged that the richest 10% of Britonsgained most from the money creation programme known as quantitativeeasing, since the increase in the supply of credit boosted demand forfinancial assets. Since the better off held a greater proportion ofthese assets, 40% of the gains of rising share and bond prices wentto the richest 5% of households.https://www.theguardian.com/business/2017/aug/08/total-uk-wealth-city-property-homes-inequality-saving

Or basically what I said a week or two ago, QE was helicopter money,but designed only to land on carefully-chosen beneficiaries, therebyavoiding inflation of general prices.

QE is certainly not spread evenly.

Post by JoeThe same has happened with all the big central banks, the Fed, theECB, BOJ etc. I'm surprised that the Guardian is willing toacknowledge this, possibly the greatest theft in history.

One of the interesting things about the story was that the Guardianpublished it. A similar surprise is to see the following positivecomments in the FT:

Signs are growing that the weaker pound is boosting demand for UKmanufactured goods, helping to reduce the country’s reliance on consumerspending to drive economic growth.

Interviews conducted with at least 700 UK businesses during June and thefirst half of July by agents of the Bank of England suggest activity haspicked up in export supply chains and that _UK manufacturers areincreasingly producing goods that were previously imported_.

This pick-up in demand, supported by the depreciation of sterling sincethe Brexit vote and an acceleration of growth elsewhere in the globaleconomy, has encouraged some manufacturers to invest more both toimprove efficiency and expand capacity. Sterling has depreciated by 14per cent on a trade-weighted basis since the Brexit referendum.

The BoE report, released on Wednesday, suggests manufacturers’ plans forinvestment during the next 12 months remain stronger than they have beenat any time since spring 2015. Investment intentions among servicescompanies have also recovered during the past year, following a sharpfall immediately after last summer’s vote to leave the EU.

https://www.ft.com/content/59f58aa8-7cea-11e7-9108-edda0bcbc928

Both stories are very different from the usual negative output of bothrags.

Post by James HarrisA few things are worth picking out of this story in the Guardian, e.g.UK total assets, the UK market's attractiveness to other countries, andwhom QE has helped the most.A booming City and rising house prices provided a double boost toBritons holding assets in 2016 as they pushed the nation’s wealththrough the £10tn mark, according to a new survey.Lloyds Bank’s private banking arm said total household wealth in the UKincreased by £892bn last year – with the property and financial marketseach responsible for half the rise.News of the 9% jump in the value of the assets from £9.6tn to £10.5tnduring 2016 is likely to rekindle the debate about the UK’s wealthinequality. Previous surveys have shown that a tenth of adults own halfthe nation’s wealth, while 15% own nothing or have negative wealth.The Bank of England has acknowledged that the richest 10% of Britonsgained most from the money creation programme known as quantitativeeasing, since the increase in the supply of credit boosted demand forfinancial assets. Since the better off held a greater proportion ofthese assets, 40% of the gains of rising share and bond prices went tothe richest 5% of households.https://www.theguardian.com/business/2017/aug/08/total-uk-wealth-city-property-homes-inequality-saving